Interaction between monetary policy and bank regulation: Theory and European practice
The European Union has pursued a number of initiatives to create a safer and sounder financial sector for the single market. In parallel, bold...
The macro-micro conflict
There has always been conflict between macro- and microeconomic regulation. Microeconomic policy reigns supreme during good times, and macro during...
Human Capital and International Portfolio Diversification: A Reappraisal
We study the implications of human capital hedging for international portfolio choice. First, we document that, at the household level, the degree of...
Volatility, financial crises and Minsky's hypothesis
Does low volatility in financial markets mean that another financial crisis is more likely? And should we be worried when everything is OK? This...
Asset pricing with heterogeneous preferences, beliefs, and portfolio constraints
Journal of Monetary Economics, Vol 75, pp. 21-34.
Shaken but not Stirred? The Banking System Seven Years after the Crisis
Speech given by Dr. Andreas Dombret, Member of the Executive Board of the Deutsche Bundesbank at the London School of Economics and Political Science...
Papers by Otmar Issing and Charles Goodhart on the occasion of a Conference in honour of Prof Ben Friedman, held in Frankfurt on June 24, 2015
Two papers read on the occasion of a Conference in honour of Prof Ben Friedman, held in Frankfurt on June 24, 2015. Their titles are: "Some remarks on...
What is the expected return on the market?
This paper presents a new lower bound on the equity premium in terms of a volatility index, SVIX, that can be calculated from index option prices...
Endogenous Contractual Externalities
We study effort and risk-taking behaviour in an economy with a continuum of principal-agent pairs where each agent exerts costly hidden effort. When...
Can We Prove a Bank Guilty of Creating Systemic Risk? A Minority Report
Since increasing a bank's capital requirement to improve the stability of the financial system imposes costs upon the bank, a regulator should ideally...
Parameterized Games, Minimal Nash Correspondences, and Connectedness
Economics and game theory are replete with examples of parameterized games. We show that all minimal Nash payoff USCOs belonging to the Nash...
Stationary Markov Equilibria for K-Class Discounted Stochastic Games
For a discounted stochastic game with an uncountable state space and compact metric action spaces, we show that if the measurable-selection-valued...
A Fixed Point Theorem for Measurable-Selection-Valued Correspondences Arising in Game Theory
We establish a new fixed point result for measurable-selection-valued correspondences with nonconvex and possibly disconnected values arising from the...
The Interest rate conditioning assumption
A central bank’s forecast must contain some assumption about the likely future path for its own policy-determined short-term interest rate. Most of...
Iceland, Greece and political hectoring
The Greek and the Icelandic crisis have much in common, not the least the heavy pressure from foreign countries and the hectoring from their public...
The Swiss Black Swan Bad Scenario: Is Switzerland Another Casualty of the Eurozone Crisis
Financial disasters to hedge funds, bank trading departments and individual speculative traders and investors seem to always occur because of non...
